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PART I
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the fiscal year ended December 31, 2002
Commission file number 000-16757
CONCORD MILESTONE PLUS, L.P.
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(Exact name of registrant as specified in its charter)
DELAWARE 52-1494615
- -------------------------------------------------------------- ---------------------------------
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
200 CONGRESS PARK DRIVE, SUITE 103,
DELRAY BEACH, FLORIDA 33445
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (561) 394-9260
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Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Class A Interests ("Class A Interests"), each such interest representing an
assignment of one Class A Limited Partnership Interest held by CMP Beneficial
Corp., a Delaware corporation (the "Assignor"), under the Amended and Restated
Agreement of Limited Partnership (the "Partnership Agreement") of Concord
Milestone Plus, L.P.
(Title of Class)
Class B Interests ("Class B Interests"), each such interest representing an
assignment of one Class B Limited Partnership Interest held by the Assignor
under the Partnership Agreement.
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
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Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2):
Yes No X
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As of March 21, 2003, 1,518,800 Class A Interests and 2,111,072 Class B
Interests were outstanding.
The Class A and Class B Interests are not traded on any established public
trading market.
DOCUMENTS INCORPORATED BY REFERENCE NONE
CONCORD MILESTONE PLUS, L.P.
2002 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
Page
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PART I .............................................................................................
Item 1. Business ........................................................................ 2
Item 2. Properties ...................................................................... 3
Item 3. Legal Proceedings ............................................................... 10
Item 4. Submission of Matters to Vote of Security Holders ............................... 10
PART II ............................................................................................
Item 5. Market for Registrant's Units and Related Security Holders Matters .............. 11
Item 6. Selected Financial Data ......................................................... 12
Item 7. Management's Discussion and Analysis of Financial Condition and Results of
Operations .................................................................. 14
Item 7A. Quantitative and Qualitative Disclosures About Market Risk...................... 18
Item 8. Financial Statements and Supplementary Data ..................................... 19
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure .................................................................. 35
PART III ...........................................................................................
Item 10. Directors and Officers of the Registrant ....................................... 36
Item 11. Compensation ................................................................... 37
Item 12. Security Ownership of Certain Beneficial Owners and Management ................. 37
Item 13. Certain Relationships and Related Transactions ................................. 38
Item 14. Controls and Procedures ........................................................ 39
Item 15. Exhibits and Reports on Form 8-K ............................................... 39
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PART I
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This Annual Report on Form 10-K (this "Report") and any documents
incorporated herein by reference, if any, contain forward-looking statements
that have been made within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Such forward-looking statements are based on current expectations,
estimates and projections about the Partnership's (as defined below) industry,
management beliefs, and certain assumptions made by the Partnership's management
and involve known and unknown risks, uncertainties and other factors. Such
factors include, among other things, the following: general economic and
business conditions, which will, affect the demand for retail space or retail
goods, availability and creditworthiness of prospective tenants, lease rents and
the terms and availability of financing; risks of real estate development and
acquisition; governmental actions and initiatives; and environmental and safety
requirements. These statements are not guarantees of future performance and are
subject to certain risks, uncertainties and assumptions that are difficult to
predict; therefore, actual results may differ materially from those expressed or
forecasted in any such forward-looking statements. Unless required by law, the
Partnership undertakes no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events or otherwise.
ITEM 1. BUSINESS.
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(a) General Development of Business.
Concord Milestone Plus, L.P. (the "Partnership") was organized as a
Delaware limited partnership on December 12, 1986 with CM Plus Corporation, a
Delaware corporation as its general partner (the "General Partner"). The General
Partner is wholly owned by Milestone Properties, Inc.("MPI"). MPI reorganized
its subsidiaries whereby CM Plus Corporation is now a wholly owned subsidiary of
MPI. This reorganization had no effect on CM Plus Corporation or the
Partnership. The Partnership is engaged in the business of owning and operating
three shopping centers. CMP Beneficial Corp., a wholly owned subsidiary of MPI,
was organized under Delaware law in December 1986 for the sole purpose of
holding limited partnership interests in the Partnership for the benefit of
holders of the Class A Interests and Class B Interests and has engaged in no
business activities other than fulfilling its obligations under the Amended and
Restated Agreement of Limited Partnership of the Partnership (the "Partnership
Agreement").
(b) Industry Segment Information.
The Partnership has only one industry segment, commercial real estate.
See Item 6, "Selected Financial Data", of this Report for a summary of the
Partnership's operations for the last five fiscal years.
(c) Narrative Description of Business.
The Partnership was formed for the purpose of investing in existing
income-producing commercial and industrial real estate, such as shopping
centers, office buildings, free-standing commercial buildings, warehouses and
distribution centers. The Partnership currently owns and operates three shopping
centers, one located in Searcy, Arkansas (the "Searcy Property"), one located in
Valencia, California (the "Valencia Property") and one located in Green Valley,
Arizona (the "Green Valley Property").
The amount of revenues from tenants attributable to the Searcy
Property, the Valencia Property and the Green Valley Property (collectively, the
"Properties") was (i) $643,118, $1,454,745, $1,286,571 respectively, for the
fiscal year ended December 31, 2002, (ii) $464,554, $1,434,135, $1,215,203
respectively, for the fiscal year ended December 31, 2001, and (iii) $415,505,
$1,336,478, $1,299,161 respectively, for the fiscal year ended December 31,
2000. There are no tenants affiliated with the Partnership.
See Item 2, "Properties", of this Report for additional information as
to the Properties, including a description of the competitive conditions
affecting them.
(d) Employees
The Partnership employs six people at the Green Valley Property who
provide general administrative and maintenance services.
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Milestone Property Management, Inc., an affiliate of the General Partner,
provides all management services and administrative services for the
Partnership. Aside from its officer, the General Partner has no employees. See
Item 11, "Compensation", of this Report.
ITEM 2. PROPERTIES.
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The Properties consist of three shopping centers: the Searcy Property,
the Valencia Property and the Green Valley Property. For the purposes of this
Report, the following is a glossary of terms:
a. "Occupancy rate" - The rate of the actual leased area (square
footage) to gross leaseable area (square footage) as of the end of
the fiscal year (December 31).
b. "Leaseable area" - The area (square footage) for which rent is
charged.
c. "Average effective annual rental per square foot" - The average
rental rate received per square foot of leased space taking rental
concessions and discounts into consideration.
d. "Total rent" - Minimum annual base rent plus percentage rental
revenue.
Mortgage Loans
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As of September 30, 1997, the Partnership closed on new mortgage loans
(the "Mortgage Loans") for the Properties in the amounts of $2,865,000 (Searcy),
$8,445,000 (Valencia) and $5,400,000 (Green Valley. All three Mortgage Loans are
secured by first mortgages on the properties. Prior to September 30, 1997, the
Properties were encumbered by mortgages granted by the Partnership to the
holders of the Partnership's Escalating Rate Collateralized Mortgage Bonds due
November 30, 1997 (the "Bonds"). The Partnership used the proceeds of the
Mortgage Loans and available cash to redeem all of the outstanding Bonds.
The Mortgage Loans and related terms at December 31, 2002 for the
Properties are summarized as follows:
PRINCIPAL MONTHLY PAYMENTS
BALANCE AT INTEREST OF PRINCIPAL
PROPERTY/LOCATION DECEMBER 31, 2002 RATE % AND INTEREST
- ----------------- ----------------- -------- ----------------
Searcy, AR $ 2,714,099 8.125 $ 21,640
Valencia, CA 7,839,064 8.125 65,881
Green Valley, AZ 5,122,790 8.250 41,252
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Total $15,675,953 $128,773
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The Mortgage Loans require payments of principal and interest through
and including September 1, 2007. On October 1, 2007, the balance of principal
and interest is estimated to be $2,505,981, $7,003,227 and $4,738,096 for the
Searcy, Valencia and Green Valley Properties, respectively, and will be due and
payable. Subsequent to October 31, 2003 and prior to May 31, 2007, each Mortgage
Loan may be prepaid in whole but not in part on any payment date with a
prepayment penalty equal to the greater of (i) 1% of the outstanding principal
balance at such time, or (ii) the excess, if any, of the present value of the
remaining scheduled principal and interest payments (including any balloon
payment), discounted at the Discount Rate (as defined below), over the amount of
principal being prepaid. The Mortgage Loans may be prepaid without penalty on
any payment date after May 31, 2007. The Discount Rate is a rate determined as
of the week ending prior to the prepayment date and is based on the published
rates of U.S. Government securities having maturities approximating the maturity
date of the Mortgage Loans. The Mortgage Loans are each secured by first
mortgages on all three of the Partnership's Properties and a default under any
of the Mortgage Loans constitutes a default on all of the Mortgage Loans. Each
mortgage may be released at the Partnership's option after the corresponding
Mortgage Loan is fully paid provided that no event of default exists under any
of the Mortgage Loans, the mortgagee has not given the Partnership notice of any
event which, with the passage of time, would constitute an event of default, and
certain other conditions are satisfied.
In connection with the Green Valley Mortgage Loan, the Partnership has
deposited $150,000 into an escrow account (the "Green Valley Escrow Account")
with the lender. The funds held in the Green Valley Escrow Account may be
released upon the execution of a new lease for the major tenant space, with a
termination date of July 31, 2004 or later, and the satisfaction of certain
other conditions.
CM Plus Corporation, the general partner of the Partnership,
guarantees certain limited recourse obligations under the Mortgage Loans.
The Searcy Property
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Searcy, Arkansas
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Location. The Searcy Property is situated on an irregularly shaped
parcel of approximately 10.78 acres, which has frontages on Race Avenue and
Frontage Road in the City of Searcy, Arkansas. Searcy, the county seat of White
County, is located in the central portion of the State of Arkansas,
approximately 50 miles northeast of Little Rock, Arkansas. The Searcy Property
is part of a two-mile stretch of commercial development along Race Avenue that
is the main shopping area for the city, county and surrounding areas. Searcy's
marketing area includes all of White County and portions of surrounding
counties.
The Searcy Property is part of a larger shopping complex known as the
Town and Country Plaza. In addition to the Searcy Property, the Town and Country
Plaza consists of an approximately seven acre parcel (formerly the site of a
free-standing Wal-Mart department store which is now sub-divided into four
retail stores) and five adjacent out parcels totaling 3.86 acres.
Description. The Searcy Property, which was completed in July 1985, is
a one-story masonry and steel building whose exterior is painted concrete block
with masonry, brick and glass fronts. The Searcy Property contains 78,436 gross
leasable square feet divided into eleven units. The entire Town and Country
Plaza has parking for 970 cars of which approximately 570 parking spaces are
allocated to the Searcy Property. In the opinion of the General Partner, the
Searcy Property is adequately insured.
Taxes. The Partnership's adjusted federal income tax basis for the
Searcy Property is approximately $2,793,057, of which $430,000 is allocated to
land and $2,363,057 to the building and improvements. For financial statement
purposes, the Partnership depreciates the cost of the building over 31.5 years
and improvements over 5 to 10 years using the straight-line method of cost
recovery.
Competition. There are three shopping centers within two miles to the
west of the Town and Country Plaza on Race Avenue. The first shopping center
consists of a Goody's department store and various smaller stores. The second
shopping center consists of a Fred's discount store, Warehouse Foods, a Sears
catalog store and two satellite stores. The third center consists of a Kroger
food store and a Revco drugstore. Directly across the highway from the Searcy
Property is a Wal-Mart superstore. This Wal-Mart relocated from the Town and
Country Plaza in 1992. Hastings Book and Music, Big Lots, Hibetts Sports and TSC
Tractor Supply currently occupy Wal-Mart's former space in the Town and Country
Plaza.
Operating and Tenant Information. As of March 1, 2003, there were ten
tenants, including two anchor tenants, at the
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Searcy Property. The anchor tenants are J.C. Penney department store and Dunlap
Co. The other eight tenants provide a variety of goods and services. The
occupancy rate was 98.7 %, 98.7%, and 78.8%, as of December 31, 2002, 2001, and
2000, respectively.
The tables on pages 7 and 8 of this Report further describe and
summarize certain operating data and tenant information for the Property as of
December 31, 2002.
Old Orchard Shopping Center
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Valencia, California
- --------------------
Location. The Valencia Property is situated on an approximately
9.94-acre parcel that has frontages on Lyons Avenue and Orchard Village Road in
the town of Valencia, California. Valencia is located in the Santa Clarita
Valley in Los Angeles County, approximately 35 miles north of Los Angeles. Old
Orchard Shopping Center is located on the northwest corner of Lyons Avenue and
Orchard Village Road in a heavily developed commercial area. Lyons Avenue is
improved with shopping centers, fast food restaurants, housing developments and
free standing convenience stores. The surrounding area is densely populated with
apartments, condominiums and single family residences.
Description. Old Orchard Shopping Center is an eight building,
one-story masonry and steel shopping center complex that was originally
constructed in 1965. During 1985 and 1986, the shopping center was renovated and
enlarged to 103,413 square feet of gross leasable area. The exterior
construction is pre-cast concrete, fluted block and decorative tile. The
shopping center has over 478 parking spaces. In the opinion of the General
Partner, the Valencia Property is adequately insured.
Taxes. The Partnership's adjusted federal income tax basis for the
Valencia Property is $10,363,831, of which $6,500,000 is allocated to land and
$3,863,831 is allocated to the buildings and improvements. For financial
statement purposes the Partnership depreciates the cost of the buildings over
31.5 years and improvements over 5 to 10 years using the straight-line method of
cost recovery.
Competition. In 1996, a 78,000 square foot shopping center opened on
Old Orchard Street across from the Valencia Property. This center includes a
46,000 square foot Ralph's Supermarket, a 16,000 square foot drugstore and
16,000 square feet of smaller stores. This shopping center initially had an
adverse impact on tenant sales but it has not materially adversely affected the
occupancy rate at the Valencia Property. Within two miles of the Valencia
Property there are competing shopping facilities at Newhall Plaza with a Von's
Food Store and 10 satellite stores, Granary Square with a Hughes Food Market,
Long's Drugstore and 26 satellite stores, a Safeway Supermarket complimented by
14 satellite stores and the Alpha Beta Center with Alpha Beta Food stores and 16
satellite stores. In 1992, a strip center anchored by a Ralph's Foods opened
within a mile of the Valencia Property.
Operating and Tenant Information. As of March 1, 2003, there were 22
tenants, including two anchor tenants, at the Valencia Property. The two anchor
tenants are an Albertson's grocery store and a Rite Aid pharmacy. The other 20
tenants provide a variety of goods and services. The occupancy rate was 94.68%,
96.21%, and 99.50%, in 2002, 2001 and 2000, respectively.
The tables on pages 7 and 8 further describe and summarize certain
operating data and tenant information for the Property as of December 31, 2002.
Green Valley Mall
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Green Valley, Arizona
- ---------------------
Location. The Green Valley Property, a mall complex known as the Green
Valley Mall, is situated on an approximately 21.31-acre parcel in the Town of
Green Valley, Arizona. Green Valley is a planned adult community located in Pima
County in the Santa Cruz River Valley approximately 25 miles south of Tucson.
Green Valley has three hotels and a number of office buildings, several
community centers and eight 18 hole golf courses. The Green Valley Property is
located at Intersection 65 of Interstate 19 and Esperenza Boulevard and serves
Pima County, as well as Santa Cruz County to the south with additional access
from La Canada Road.
Description. Green Valley Mall is an open-air shopping complex
originally built in the 1960's and expanded at various times throughout the
1970's and 1980's. The shopping center is comprised of several buildings,
including some that are free standing, totaling 176,887
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gross leasable square feet (adjusted by 800 square feet representing the mall
office). The exterior construction is a combination of adobe block, split face
block and painted concrete block. The mall has approximately 975 parking spaces.
In the opinion of the General Partner, the Green Valley Property is adequately
insured.
Taxes. The Partnership's adjusted federal income tax basis for the
Green Valley Property is $9,020,992, of which $5,100,000 is allocated to land
and $3,920,992 to the buildings and improvements. For financial statement
purposes, the Partnership depreciates the cost of the buildings over 31.5 years
and improvements over 5 to 10 years using the straight-line method of cost
recovery.
Competition. The Green Valley Property competes directly with the
142,500 square foot Continental Shopping Plaza located at Continental Road and
Interstate 19 approximately one mile south of the Green Valley Property. The
Continental Shopping Plaza is anchored by a Safeway Supermarket. There is a
shopping center located 3 miles to the north of the Green Valley Property in the
newly incorporated town of Sahuarita. This shopping center includes a 65,000
square foot Wal-Mart Department Store and a 42,000 square foot Bashas' Food
Store as anchor tenants plus 25,000 square feet of space for local tenants.
Another center located to the north of the Green Valley Property, closed during
1995 and was anchored by a 45,000 square foot Kmart and 10,000 square feet of
space for local tenants. In mid summer 2000, a six screen multiplex theater
opened adjacent to Kmart. Since the incorporation of this town, several large
areas have been rezoned for commercial development. One shopping area located
2.5 miles north of Green Valley, called "The Quorum", opened within the last two
years. Also in 2002 a Safeway Supermarket was built 2 miles north of the Green
Valley property.
Operating and Tenant Information. As of March 1, 2003, there were 67
tenants, including two anchor tenants, at the Green Valley Property. The two
anchor tenants include a Beall's outlet store and an Ace Hardware store. The
third anchor tenant space is currently unoccupied. The other 65 tenants provide
a variety of goods and services. The occupancy rate was 61.88%, 67.33%, and
70.73%, in as of December 2002, 2001, and 2000, respectively.
During February 1999, the Partnership received notice from Abco, the
principal anchor tenant at the Green Valley Property, that Abco would not be
renewing its lease at the expiration of its term on July 31, 1999. Abco vacated
its space in May, 1999. This space represents about 20% of the Green Valley
Property's leaseable area. The Partnership retained a large regional real estate
brokerage firm to help market the space. Such brokerage firm was replaced in
2000 by another large regional brokerage firm. Each of the brokerage firms have
shown the space to several qualified prospective tenants. No replacement tenant
for the entire space has been identified. The recent building of a Safeway
Supermarket near the Green Valley Property has effectively negated the potential
of a supermarket as a replacement tenant for the former Abco. In March 2003, a
lease was executed with Family Dollar, Inc. for a 9,571 square foot portion of
the former Abco building. The lease is not effective until signed copies are
actually received by Family Dollar. As of March 21, 2003, the Partnership is
awaiting the return of a certain document required to be signed by the
Partnership's lender prior to returning executed lease documents to Family
Dollar. The Partnership expects to spend approximately $300,000 in conjunction
with the Family Dollar lease, including the costs of replacing the roof on the
former Abco building. Currently, approximately $150,000 of the Partnership's
working capital is being held in escrow in connection with the refinancing by
the holder of the first mortgage on the Green Valley Property pending the
resolution of the Abco vacancy. The Partnership is uncertain at this point if
this $150,000 working capital or a portion of it will or will not be released as
a result of the Family Dollar lease.
Many of the tenants at the Green Valley Property have short term
leases. It is not possible to determine the long-term effects of the vacancy of
either the Abco space or the re-leasing of a portion of such space to Family
Dollar. To date the vacancy of the Abco space has not had a material adverse
effect on the results of operations at the Green Valley Property by impairing
the Partnership's ability to retain other tenants or to renew their leases on
favorable terms. However, no assurances can be given that the remaining Abco
space vacancy won't cause existing tenants to leave, or won't cause tenant
renewals to be at lower rental rates. The drop in the occupancy rate of 67.33%
at December 31, 2001 to 61.88% at December 31, 2002 is in line with the change
in market occupancy in the Green Valley market area. The Partnership will incur
expenses in releasing the remaining vacant Abco space and cannot predict how
soon such space will be leased and the terms of such new lease or leases. As of
March 19, 2003 approximately 20% of the tenants whose leases renew in 2003 have
renewed such leases at increased and competitive lease rates and Family Dollar
has signed a lease for a portion of the Abco space. Although these are viewed as
positive trends, the General Partner can not guarantee that the other tenants
with leases expiring in 2003 and in future years will renew such leases.
The tables on pages 7 and 8 of this Report further describe and
summarize certain operating data and tenant information for the Property as of
December 31, 2002.
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TABLE 1. SUMMARY OF OPERATING AND TENANT INFORMATION AS OF DECEMBER 31, 2002
TENANT OCCUPYING
>10% OF GLA/NATURE SQUARE OCCUPANCY BASE RENT PERCENTAGE LEASE ANNUAL
LOCATION PROPERTY OF BUSINESS FEET RATE PER SQ.FT. RENT & OTHER EXPIRATION R/E TAXES
- ------------ -------------------- ------------------ ------ --------- ---------- --------------------- ---------- ---------
Searcy, AR Town & Country Plaza 78,436 98.72% $6.12(1) $27,915
J.C. Penney 39,396 $5.22 1.5% of Sales in 8/31/2007
Department Store excess of $11,820,004.
Pro-rata reimbursement
for real estate taxes
over the base year
amount. Common area
maintenance reimbursed
at fixed intervals
over the lease term.
Dunlap Co. 15,600 $6.00 Common area maintenance 1/31/2006
Junior Department and insurance
Store reimbursement capped
at $7,800 annually and
$1,080 annually,
respectively. Real
Estate taxes reimbursed
over the 2001 base year.
Valencia, Old Orchard 103,41 94.68% $10.99(1) $148,644
CA Shopping Ctr.
Albertson's 31,842 $9.42 1.25% of Sales in 6/30/2006
Full Service excess of $38,000,000
Grocer less amounts paid for
property taxes,
assessments and
insurance premiums.(2)
Rite Aid 18,125 $2.48 Rent is payable in an 5/31/2005
Pharmacy amount equal to 3% of
the tenant's gross sales
for the previous month,
but not less than
$45,000 annually. Pays
no reimbursed expenses.
Green Green Valley None(3) 176,887 61.88% $8.12(1) $264,788
Valley, AZ Mall
(1) Represents the average rental rate including base and percentage rent per
square foot of leased space taking rental concessions and discounts into
consideration.
(2) Pro-rata reimbursement for real estate taxes, common area maintenance and
insurance.
(3) The sole space greater than 10% of GLA is currently vacant. Abco vacated
this space in May, 1999.
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TABLE 2. SUMMARY OF LEASE EXPIRATIONS AS OF DECEMBER 31, 2002
% OF TOTAL
ANNUAL
YEAR OF NUMBER OF GROSS LEASABLE ANNUAL MINIMUM
LOCATION PROPERTY LEASE EXPIRATION LEASES EXPIRING AREA EXPIRING MINIMUM RENT RENT
- ---------------- --------------------------- ---------------- --------------- ------------- ------------ -------
Searcy, AR Town & Country Plaza M-T-M 1 1,200 $7,200 1.5%
2003 2 3,160 $30,461 6.4%
2004 1 5,973 $35,838 7.6%
2005 2 6,680 $50,420 10.6%
2006 1 15,600 $93,600 19.7%
2007 1 39,396 $205,600 43.3%
2011 2 5,422 $51,295 10.9%
Vacancies 1 1,005 - -
-- ------- ---------- ------
Total 11 78,436 $474,414 100.0%
===== == ======= ========== ======
Valencia, CA Old Orchard Shopping Center M-T-M 1 2,490 $40,372 3.8%
2003 6 20,520 $268,326 24.8%
2004 1 4,200 $64,581 6.0%
2005 5 30,609 $237,137 21.9%
2006 2 32,194 $309,954 28.7%
2007 5 6,700 $138,513 12.8%
2012 1 1,200 $21,600 2.0%
Vacancies 4 5,500 - -
-- ------- ---------- ------
Total 25 103,413 $1,080,483 100.0%
===== == ======= ========== ======
Green Valley, AZ Green Valley Mall M-T-M 3 4,082 $38,420 4.3%
2003 32 32,417 $333,668 37.5%
2004 9 16,562 $90,648 10.2%
2005 9 20,959 $184,128 20.7%
2006 8 25,770 $210,168 23.6%
2007 1 2,310 $23,186 2.7%
2008 2 7,360 $9,600 1.0%
Vacancies 20 67,427 - -
-- ------- ---------- ------
Total 84 176,887 $889,818 100.0%
===== == ======= ========== ======
-8-
COMMITMENTS AND CONTINGENCIES
- -----------------------------
Investments in real property create a potential for environmental
liability on the part of the owner, operator or developer of such real property.
If hazardous substances are discovered on or emanating from any of the
Properties, the Partnership and/or others may be held strictly liable for all
costs and liabilities relating to the clean-up of such hazardous substances,
even if the problem was caused by another party or a tenant. The Partnership is
not aware of any existing environmental conditions that will have a material
effect on the financial statements.
ITEM 3. LEGAL PROCEEDINGS
-----------------
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
---------------------------------------------------
None
-9-
PART II
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ITEM 5. MARKET FOR REGISTRANT'S UNITS AND RELATED SECURITY HOLDERS MATTERS.
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(a) Class A and Class B Interests are not traded on any
established public trading market and no organized market has developed for the
interests in the Partnership. Sales of Class A and Class B Interests occur from
time to time through independent broker-dealers, but to the best of the
Partnership's knowledge, there are no market makers for the interests. Recently
published information relating to other real estate limited partnerships (which
may or may not be analogous to the Partnership) indicates that sales of limited
partnership interests in those partnerships occur at substantial discounts from
the amounts of the original investments.
(b) As of March 1, 2003, 1,518,800 Class A Interests and
2,111,072 Class B Interests outstanding were held by approximately 1,103 and
1,178 holders, respectively.
(c) The Partnership is a limited partnership and, accordingly,
does not pay dividends. Quarterly distributions of cash are made to its
partners, from time to time, depending upon distributable cash flow and certain
other conditions.
Pursuant to the Partnership Agreement, distributable cash flow (as
defined therein), if any, for each fiscal quarter is distributed as follows: (i)
first, 99% to the holders of the Class A Interests as a group and 1% to the
General Partner until the holders of the Class A Interests have received an
amount of cumulative distributions necessary to provide such holders with a
non-compounded 10.5% cumulative annual return (determined in accordance with the
Partnership Agreement); (ii) next, 90% to the holders of the Class A Interests
and 10% to the General Partner until the holders of the Class A Interests have
received distributions of distributable capital proceeds (i.e., net proceeds of
a sale or other disposition or a refinancing of Properties available for
distribution) and uninvested offering proceeds equal to $10.00 for each Class A
Interest plus an amount of cumulative distributions necessary to provide such
holders with a cumulative, non-compounded 12.5% annual return (determined in
accordance with the Partnership Agreement on their Adjusted Priority Base Amount
as defined in the Partnership Agreement) (a "12.5% Priority Return"); and (iii)
thereafter, 85% to the holders of the Class B Interests, 5% to the holders of
the Class A Interests and 10% to the General Partner.
Pursuant to the Partnership Agreement, distributable capital proceeds
are distributed as follows: (i) first, 100% to the holders of the Class A
Interests as a group until they have received distributions of distributable
capital proceeds and uninvested offering proceeds equal to $10.00 for each Class
A Interest plus an amount of cumulative distributions necessary to provide such
holders with a 12.5% Priority Return; and (ii) thereafter, 85% to the holders of
the Class B Interests and 15% to the General Partner.
Distributable cash flow, as defined in the Partnership Agreement,
means, with respect to any period in the Partnership Agreement, (i) revenues and
payments (which do not include refundable deposits or unearned rent) of the
Partnership received in cash during such period, and reserves set aside out of
revenues during prior periods and no longer needed for the Partnership's
business, but not including cash proceeds attributable to a capital transaction
(as defined in the Partnership Agreement), Bond proceeds or capital
contributions (as defined), less (ii) the sum of (A) amounts paid in cash by the
Partnership during such period for operating expenses of the Partnership
(excluding amounts paid from reserves or funds provided by capital contributions
or loans), for debt payments, and for other fees or payments to the General
Partner, (B) any capital expenditures with respect to Properties, and (C) any
amount set aside for the restoration, increase or creation of reserves.
Distributable cash flow is deemed to include the amount of any income tax
withheld with respect to revenues that are includable in distributable cash
flow.
The Partnership suspended making distributions with respect to Class A InterestS
subsequent to the second quarter of 1999, after determining that unrestricted
working capital levels were inadequate due to: (1) Abco vacating its space at
the Green Valley Property in May, 1999 and (2) several capital outlays for work
performed at the Properties.
There have been no distributions with respect to the Class B Interests.
In general, profits are allocated annually among the holders of Class
A Interests and Class B Interests and the General Partner, first in the ratio
and to the extent that they receive distributions of distributable cash flow.
Profits will next be allocated 100% to holders of Class A Interests until their
capital accounts equal the greater of zero or their Adjusted Priority Base
Amounts (as defined in the Partnership Agreement)
-10-
plus their 12.5% Priority Return. Any additional profits will be allocated to
the holders of Class B Interests and the General Partner to increase their
capital accounts to reflect the manner in which they are expected to share in
further distributions.
Gain arising upon the sale of a Property or otherwise is allocated
first to holders of Class A Interests and Class B Interests and the General
Partner to eliminate any deficits in their capital accounts, and then to the
holders of the Class A Interests and Class B Interests and the General Partner
to increase their capital accounts to reflect the manner in which they are
expected to share in further distributions.
In general, losses are allocated first to the holders of Class B
Interests and the General Partner in the ratio and to the extent of any positive
balances in their capital accounts; then, to the holders of Class A Interests to
the extent of any positive balances in their capital accounts; and finally, 100%
to the General Partner.
ITEM 6. SELECTED FINANCIAL DATA.
-----------------------
The following page sets forth a summary of the selected financial
information for the Partnership. The information below should be read in
conjunction with the audited financial statements and with the information
presented in Item 7, "Management's Discussion & Analysis of Financial Condition
and Results of Operations."
-11-
CONCORD MILESTONE PLUS, L.P.
(A LIMITED PARTNERSHIP)
SELECTED FINANCIAL DATA
FOR YEAR ENDED FOR YEAR ENDED FOR YEAR ENDED FOR YEAR ENDED FOR YEAR ENDED
DECEMBER 31, 2002 DECEMBER 31, 2001 DECEMBER 31, 2000 DECEMBER 31, 1999 DECEMBER 31, 1998
----------------- ----------------- ----------------- ----------------- -----------------
Operating Statement Data:
Revenue $3,392,405 $3,146,281 $3,079,207 $2,986,502 $3,103,638
Net (loss) income (11,527) (240,452) (134,495) (84,307) 31,270
Balance Sheet Data:
Total assets 20,442,232 20,631,508 21,081,573 21,423,375 21,841,605
Long term debt 15,675,953 15,912,710 16,130,734 16,327,881 16,513,054
Total liabilities 16,165,963 16,343,712 16,553,325 16,760,632 16,974,551
Statement of Partners' (Deficit)
Capital:
General Partner (79,802) (79,687) (77,282) (75,937) (73,894)
Class A Interests 4,356,071 4,367,483 4,605,530 4,738,680 4,940,948
Class B Interests 0 0 0 0 0
Total 4,276,269 4,287,796 4,528,248 4,662,743 4,867,054
Per 100 Class A Interests (a):
Net (loss) income, basic &
diluted (b): (.76) (15.83) (8.86) (5.55) 2.06
Distributions (c): 0 0 0 4.61 3.29
Return of Capital (d): 0 0 0 4.61 3.29
See Notes to Selected Financial Data
-12-
NOTES TO SELECTED FINANCIAL DATA SCHEDULE:
- -----------------------------------------
(a) All income (loss) allocated with respect to Class A
Interests. No income (loss) was allocated with respect to Class B Interests.
(b) The net (loss) income per 100 Class A Interests has been
calculated by dividing the net (loss) income for the period by the average
number of Class A Interests outstanding for the period and multiplying that
quotient by 100.
(c) Distributions have been allocated based upon the dates that
Class A Interests were issued. Distributions with respect to each fiscal quarter
of the Partnership are paid 60 days following the end of that fiscal quarter.
There have been no distributions with respect to the Class A Interest in 2000,
2001 and 2002. No distributions were paid with respect to Class B Interests.
(d) Return of Capital is defined as distributions in excess of
cumulative net income.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS.
---------------------
Certain statements made in this report may constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. See Part I.
The following discussion and analysis should be read in conjunction
with the Financial Statements of the Partnership and the notes thereto appearing
in Item 14 of this report.
GENERAL
- -------
The Partnership commenced a public offering of Equity Units and Bond
Units (together, "Units") on April 8, 1987 in order to fund the Partnership's
real property acquisitions. The Partnership terminated the public offering of
Units on April 2, 1988. Each Equity Unit consists of 100 Class A Interests and
100 Class B Interests. Each Bond Unit consisted of $1,000 principal amount of
the Partnerships Escalating Rate Collateralized Mortgage Bonds and 36 Class B
Interests. On April 14, 1988, the Partnership held its final closing on the sale
of Units. The Partnership was fully subscribed to with a total of 16,452 Bond
Units and 15,188 Equity Units from which the Partnership received aggregate net
proceeds (after deduction of sales commissions, discounts and selling agent's
expense otherwise required to be reimbursed to the General Partner and its
Affiliates) of $29,285,960. The Partnership purchased three shopping centers
with the proceeds from this offering. No further acquisitions are planned and
the Partnership has no plans to raise additional capital.
On September 30, 1997, the Partnership closed three fixed rate first
mortgage loans in the amounts of $2,865,000, $8,445,000 and $5,400,000, on the
Searcy, Valencia and Green Valley Properties, respectively. All three Mortgage
Loans are secured by first mortgages on each of the Properties. The Partnership
used the proceeds of the Mortgage Loans and available cash to redeem all of the
outstanding Bonds. The Mortgage Loans are described in further detail in Item 2.
Properties Section.
The Partnership has an agreement with Milestone Property Management,
Inc. ("MPMI"), an affiliate of the General Partner, to provide management
services to the Properties. In addition, MPMI is responsible for leasing space
at the properties and actively monitors all vacancies to ensure the highest
occupancy rate possible. All leasing is performed by MPMI and the terms of the
leases are negotiated on a lease by lease basis. During 2002, the Partnership
paid or accrued $142,473 to MPMI for management fees.
COMPETITION
- -----------
Rental properties owned by the Partnership faces substantial
competition from similar existing properties, or newly built properties, in the
vicinity in which such properties are located. Such competition is generally for
the retention of existing tenants and for new tenants upon space becoming
vacant. Competition for tenants may result in the Partnership being unable to
quickly re-lease space, require the Partnership to reduce rents or provide
rental concessions to tenants, resulting in a decline in cash flows. The
Partnership believes that the profitability of each
-13-
of the Properties is based, in part, upon its geographic location, the
operations and identity of the property's tenants, the performance of the
property and leasing managers, the maintenance and appearance of the property,
the ease of access to the property and the adequacy of property related
facilities. The Partnership also believes that general economic circumstances
and trends as well as the character and quality of new and existing properties
which may be located in the vicinity of the Properties are factors that may
affect the operation and competitiveness of the property. See Item 2
"Properties", for further detail.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
- ------------------------------------------
Management's discussion and analysis of our financial condition and
results of operations are based upon our financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
that we make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. At each balance sheet date, management evaluates its estimates,
including but not limited to, those related to the recorded values of our
properties and their possible impairment, and the deprecation lives used for our
properties and other fixed assets. We base our estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances. Actual results may differ from these estimates under
different assumptions or conditions. The estimates and critical accounting
policies that are most important in fully understanding and evaluating our
financial condition and results of operations include those discussed above, as
well as the policies listed in the footnotes to our financial statements.
RESULTS OF OPERATIONS
- ---------------------
COMPARISON OF YEAR ENDED DECEMBER 31, 2002 TO 2001.
- --------------------------------------------------
Revenues of the Partnership increased $246,124, or 7.8%, to $3,392,402 in 2002
from $3,146,281 in 2001 primarily due to the net effect of the following:
(1) a) The recovery of rent of $116,328 as a result of a tenant
bankruptcy settlement, which was recorded as income in this
period, even though the rent was charged to the tenant from
June 2000 to July 2001, but the income was never recognized
due to the poor financial condition of the tenant; b) an
increase of $86,209 is due to an increase in accrued
insurance and taxes reimbursed expenses; c) a decrease in
base rent of $13,720 due to the increase in vacancies in
Green Valley and Valencia; and d) an increase in other
income in the amount of $57,307 primarily due to a winning
appeal of 1997-2001 for Valencia's real estate direct tax
assessment, which was awarded in the third quarter ended
September 30, 2002.
An increase in management and property expenses of $51,323 or 4.69% to
$1,145,437 in 2002 from $1,094,114 in 2001 is primarily due to the increase in
insurance expense.
A decrease in professional fees and other expenses of $28,592 or
24.87% to $86,357 in 2002 from $114,949 in 2001 is primarily due to expenses
incurred in 2001 that were not incurred in 2002. The timing of these expenses
varies from year to year.
COMPARISON OF YEAR ENDED DECEMBER 31, 2001 TO 2000.
- --------------------------------------------------
Revenues of the Partnership increased $67,074, or 2.2%, to $3,146,281 in 2001
from $3,079,207 in 2000 primarily due to the net effect of the following:
(1) Rent - An increase in base rent of $94,704, or 3.7%, to
$2,655,451 in 2001 from $2,560,747 in 2000 is due to a
decrease in vacancies and an increase in base rent at the
Searcy and Valencia properties.
(2) Reimbursed Expenses - A decrease in reimbursed expenses of
$31,956, or 6.5%, to $458,441 in 2001 from $490,397 in 2000
is primarily due to the write off of tax recovery charges,
that were subsequently determined to be not collectable.
-14-
Management and property expenses increased $135,504, or 14.1%, to
$1,094,114 in 2001 from $958,610 in 2000 is primarily due to: (a) an increase in
real estate taxes at the Green Valley Property and the direct payment by the
Partnership of real estate taxes for a parcel formerly paid directly by Abco,
and (b) repairs and maintenance expenses were incurred for all three properties
in 2001 that were not incurred in 2000. The timing of these expenses varies from
year to year.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The General Partner believes that the Partnership's expected revenue
and working capital is sufficient to meet the Partnership's current and future
operating requirements. Nevertheless, because the cash revenues and expenses of
the Partnership will depend on future facts and circumstances relating to the
Partnership's properties, as well as market and other conditions beyond the
control of the Partnership, a possibility exists that cash flow deficiencies may
occur.
During February 1999, the Partnership received notice from Abco, the
principal anchor tenant at the Green Valley Property, that Abco would not be
renewing its lease at the expiration of its term on July 31, 1999. Abco vacated
its space in May, 1999. This space represents about 20% of the Green Valley
Property's leaseable area. The Partnership retained a large regional real estate
brokerage firm to help market the space. Such brokerage firm was replaced in
2000 by another large regional brokerage firm. Each of the brokerage firms have
shown the space to several qualified prospective tenants. No replacement tenant
for the entire space has been identified. The recent building of a Safeway
Supermarket near the Green Valley Property has effectively negated the potential
of a supermarket as a replacement tenant for the former Abco. In March 2003, a
lease was executed with Family Dollar, Inc. for a 9,571 square foot portion of
the former Abco building. The lease is not effective until signed copies are
actually received by Family Dollar. As of March 21, 2003, the Partnership is
awaiting the return of a certain document required to be signed by the
Partnership's lender prior to returning executed lease documents to Family
Dollar. The Partnership expects to spend approximately $300,000 in conjunction
with the Family Dollar lease, including the costs of replacing the roof on the
former Abco building. Currently, approximately $150,000 of the Partnership's
working capital is being held in escrow in connection with the refinancing by
the holder of the first mortgage on the Green Valley Property pending the
resolution of the Abco vacancy. The Partnership is uncertain at this point if
this $150,000 working capital or a portion of it will or will not be released as
a result of the Family Dollar lease.
Many of the tenants at the Green Valley Property have short term
leases. It is not possible to determine the long-term effects of the vacancy of
either the Abco space or the re-leasing of a portion of such space to Family
Dollar. To date the vacancy of the Abco space has not had a material adverse
effect on the results of operations at the Green Valley Property by impairing
the Partnership's ability to retain other tenants or to renew their leases on
favorable terms. However, no assurances can be given that the remaining Abco
space vacancy won't cause existing tenants to leave, or won't cause tenant
renewals to be at lower rental rates. The drop in the occupancy rate of 67.33%
at December 31, 2001 to 61.88% at December 31, 2002 is in line with the change
in market occupancy in the Green Valley market area. The Partnership will incur
expenses in releasing the remaining vacant Abco space and cannot predict how
soon such space will be leased and the terms of such new lease or leases. As of
March 19, 2003 approximately 20% of the tenants whose leases renew in 2003 have
renewed such leases at increased and competitive lease rates and Family Dollar
has signed a lease for a portion of the Abco space. Although these are viewed as
positive trends, the General Partner can not guarantee that the other tenants
with leases expiring in 2003 and in future years will renew such leases.
The Partnership periodically makes distributions to its owners. The
Partnership did not pay any distribution in 2002, 2001 or 2000. A 1998 fourth
quarter distribution of $50,001 was paid during February 1999. Also, a first
quarter distribution of $50,001 was paid during May 1999 and a second quarter
distribution of $20,002 was paid during August 1999. Distributions were
suspended after the second quarter of 1999 following the departure of Abco from
the Green Valley Property, which created vacant anchor tenant space.
Additionally, several capital projects were undertaken and completed at the
Properties. Further a 15,600 square feet anchor tenant at the Searcy Property
filed for Chapter 11 bankruptcy protection and vacated its store space in 2000.
The Partnership will evaluate the amount of future distributions, if any, on a
quarter by quarter basis. No assurances can be given as to the timing or amount
of any future distributions by the Partnership. Management is not aware of any
other significant trends, events, commitments or uncertainties that will or are
likely to materially impact the Partnership's liquidity.
The Partnership's Mortgage Loans are due and payable on October 1,
2007. General Partner believes that it will have the ability to refinance and or
otherwise satisfy such obligations.
The cash on hand at December 31, 2002 may be used to fund (a) costs
associated with releasing the Abco space should the costs
-15-
of releasing exceed the $150,000 already held in escrow by the Lender for this
purpose and (b) other general Partnership purposes.
Net cash provided by operating activities of $731,055 for the year
ended December 31, 2002 was comprised of (i) net loss of $11,527, (ii)
adjustments of $654,310 for depreciation and amortization and (iii) a net change
in operating assets and liabilities of $88,272.
Net cash provided by operating activities of $455,220 for the year
ended December 31, 2001 was comprised of (i) net loss of $240,452, (ii)
adjustments of $650,189 for depreciation and amortization and (iii) a net change
in operating assets and liabilities of $45,483.
Net cash provided by operating activities of $442,228 for the year
ended December 31, 2000 was comprised of (i) net loss of $134,495, (ii)
adjustments of $636,489 for depreciation and amortization and (iii) a net change
in operating assets and liabilities of $59,766.
Net cash used in investing activities of $180,624 for the year ended
December 31, 2002 was comprised of capital expenditures for building
improvements.
Net cash used in investing activities of $156,740 for the year ended
December 31, 2001 was comprised of capital expenditures for building
improvements.
Net cash used in investing activities of $166,603 for the year ended
December 31, 2000 was comprised of capital expenditures for building
improvements.
Net cash used in financing activities of $250,678 for the year ended
December 31, 2002 included (i) principal repayments on mortgage loans payable of
$236,757, and (ii) funds held in escrow of $13,921.
Net cash used in financing activities of $218,507 for the year ended
December 31, 2001 included (i) principal repayments on mortgage loans payable of
$218,024, and (ii) funds held in escrow of $483.
Net cash used in financing activities of $211,936 for the year ended
December 31, 2000 included (i) principal repayments on mortgage loans payable of
$197,147, (ii) funds held in escrow of $14,789.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
----------------------------------------------------------
The Partnership, in its normal course of business, is theoretically
exposed to interest rate changes as they relate to real estate mortgages and the
effect of such mortgage rate changes on the values of real estate. However, for
the Partnership, all of its mortgage debt is at fixed rates, is for extended
terms, and would be unaffected by any sudden change in interest rates. The
Partnership's possible risk is from increases in long-term real estate mortgage
rates that may occur over a number of years, as this may decrease the overall
value of real estate. Since the Partnership has the intent to hold its existing
mortgages to maturity (or until the sale of a Property), there is believed to be
no interest rate market risk on the Partnership's results of operations or its
working capital position. The Partnership estimates the fair value of its long
term fixed rate Mortgage Loans generally using discounted cash flow analysis
based on the current borrowing rates for similar types of debt. At December 31,
2002, the fair value of the Mortgage Loans was estimated to be $17,214,736
compared to a carrying value amount of $15,675,953.
The Partnership's cash equivalents and short-term investments, if any,
generally bear variable interest rates. Changes in the market rates of interest
available will affect from time-to-time the interest earned by the Partnership.
Since the Partnership does not rely on its interest earnings to fund working
capital needs, changes in these interest rates will not have an impact on the
Partnership's results of operations or working capital position.
-16-
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
-------------------------------------------
FINANCIAL STATEMENTS/SCHEDULES, TOGETHER WITH INDEX AND FOOTNOTES.
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL SCHEDULE
----------------------------------------------------
PAGE NO.
1. Financial Statements:
a. Concord Milestone Plus, L.P.
1. Independent Auditors' Report .......................................20
2. Balance Sheets, December 31, 2002 and December 31, 2001.............21
3. Statements of Revenues and Expenses for the Years Ended
December 31, 2002, 2001 and 2000 ...................................22
4. Statements of Changes in Partners' Capital for the Years
Ended December 31, 2002, 2001 and 2000 .............................23
5. Statements of Cash Flows for the Years Ended December
31, 2002, 2001 and 2000 ............................................24
6. Notes to Financial Statements ......................................25
2. Financial Schedule:
a. Real Estate and Accumulated Depreciation (Schedule III) ................34
This financial statement schedule of the Partnership for each of the
years ended December 31, 2002, 2001 and 2000 is filed as part of this Form 10-K
and should be read in conjunction with the Financial Statements, and related
notes thereto, of the Partnership. All other financial statement schedules have
been omitted because the required information is not present or not present in
amounts sufficient to require submission of the schedule or because the
information required is included in the financial statements or notes thereto.
-17-
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of CM Plus Corporation, General Partner of Concord
Milestone Plus, L.P.
We have audited the accompanying balance sheets of Concord Milestone Plus, L.P.
(the "Partnership") as of December 31, 2002 and 2001, and the related statements
of revenues and expenses, changes in partners' capital, and cash flows for each
of the three years in the period ended December 31, 2002. Our audits also
included the information contained in the financial statement schedule of real
estate and accumulated depreciation. These financial statements and the
financial statement schedule of real estate and accumulated depreciation are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on the financial statements and the financial statement schedule of
real estate and accumulated depreciation based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Concord Milestone Plus, L.P. as
of December 31, 2002, and 2001, and the results of its operations, changes in
partners' capital and its cash flows for each of the three years in the period
ended December 31, 2002 in conformity with accounting principles generally
accepted in the United States of America. Also, in our opinion, the information
contained in the financial statement schedule of real estate and accumulated
depreciation, when considered in relation to the basic financial statements,
presents fairly, in all material respects, the information set forth therein.
/s/ Ahearn, Jasco + Company, P.A.
Pompano Beach, Florida
February 21, 2003
-18-
CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
BALANCE SHEETS
DECEMBER 31, 2002 and 2001
December 31, December 31,
2002 2001
----------- -----------
Property:
Building and improvements, at cost $16,248,673 $16,068,049
Less: accumulated depreciation 8,431,139 7,814,386
----------- -----------
Building and improvements, net 7,817,534 8,253,663
Land, at cost 10,987,034 10,987,034
----------- ----------
Property, net 18,804,568 19,240,697
Cash and cash equivalents 1,005,152 705,399
Accounts receivable 173,001 206,749
Restricted cash 244,594 230,673
Debt financing costs, net 148,835 180,169
Prepaid expenses and other assets, net 66,082 67,821
----------- -----------
Total assets $20,442,232 $20,631,508
=========== ===========
Liabilities:
Mortgage loans payable $15,675,953 $15,912,710
Accrued interest 110,228 111,892
Deposits 92,394 82,498
Accrued expenses and other liabilities 286,382 235,007
Accrued expenses payable to affiliates 1,006 1,605
----------- -----------
Total liabilities 16,165,963 16,343,712
----------- -----------
Commitments and Contingencies
Partners' capital:
General partner (79,802) (79,687)
Limited partners:
Class A Interests, 1,518,800 4,356,071 4,367,483
Class B Interests, 2,111,072 - -
----------- -----------
Total partners' capital 4,276,269 4,287,796
----------- -----------
Total liabilities and partners' capital $20,442,232 $20,631,508
=========== ===========
See Accompanying Notes to Financial Statements
-19-
CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
STATEMENTS OF REVENUES AND EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 2002, 2001, AND 2000
December 31, December 31, December 31,
2002 2001 2000
------------ ------------ ------------
Revenues:
Rent $2,641,731 $2,655,451 $2,560,747
Reimbursed expenses 544,650 458,441 490,397
Bad debts recovered 116,328 - -
Interest and other income 89,696 32,389 28,063
---------- ---------- ----------
Total revenues 3,392,405 3,146,281 3,079,207
---------- ---------- ----------
Expenses:
Interest expense 1,306,855 1,325,740 1,346,743
Depreciation and amortization 654,310 650,869 636,489
Management and property expenses 1,145,437 1,094,114 958,610
Administrative and management fees
to related party 210,973 201,061 198,169
Professional fees and other expenses 86,357 114,949 73,691
---------- ---------- ----------
Total expenses 3,403,932 3,386,733 3,213,702
---------- ---------- ----------
Net loss $(11,527) $(240,452) $(134,495)
========== ========== ==========
Net loss attributable to:
Limited partners $(11,412) $(238,047) $(133,150)
General partner (115) (2,405) (1,345)
---------- ---------- ----------
Net loss $(11,527) $(240,452) $(134,495)
========== ========== ==========
Loss per weighted average
Limited Partnership 100 Class A
Interests outstanding, basic and diluted ($0.76) ($15.83) ($8.86)
========== ========== ==========
Weighted average number of 100
Class A interests outstanding 15,188 15,188 15,188
========== ========== ==========
See Accompanying Notes to Financial Statements
-20-
CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 2002, 2001, and 2000
General Class A Class B
Total Partner Interests Interests
---------- -------- ---------- ---------
PARTNERS' CAPITAL (DEFICIT)
January 1, 2000 $4,662,743 $(75,937) $4,738,680 -
---------- -------- ---------- ---------
Net Loss (134,495) (1,345) (133,150) -
---------- -------- ---------- ---------
PARTNERS' CAPITAL (DEFICIT)
December 31, 2000 4,528,248 (77,282) 4,605,530 -
---------- -------- ---------- ---------
Net Loss (240,452) (2,405) (238,047) -
---------- -------- ---------- ---------
PARTNERS' CAPITAL (DEFICIT)
December 31, 2001 4,287,796 (79,687) 4,367,483 -
---------- -------- ---------- ---------
Net Loss (11,527) (115) (11,412) -
---------- -------- ---------- ---------
PARTNERS' CAPITAL (DEFICIT)
December 31, 2002 $4,276,269 $(79,802) $4,356,071 -
========== ======== ========== =========
See Accompanying Notes to Financial Statements
-21-
CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 and 2000
December 31, December 31, December 31,
2002 2001 2000
------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(11,527) $(240,452) $(134,495)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 654,310 650,189 636,489
Change in operating assets and liabilities:
Decrease (increase) in accounts receivable 33,748 45,007 (41,857)
Increase in prepaid expenses and other assets, net (4,484) (7,935) (7,749)
Decrease in accrued interest (1,664) (1,532) (1,385)
Increase (decrease) in accrued expenses,
and other liabilities 61,271 71,092 (19,530)
(Decrease) increase in accrued expenses
payable to affiliates (599) (61,149) 10,755
---------- ---------- ----------
Net cash provided by operating activities 731,055 455,220 442,228
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property improvements (180,624) (156,740) (166,603)
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in restricted cash (13,921) (483) (14,789)
Principal repayments on mortgage loans payable (236,757) (218,024) (197,147)
---------- ---------- ----------
Net cash used in financing activities (250,678) (218,507) (211,936)
---------- ---------- ----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 299,753 79,973 63,689
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 705,399 625,426 561,737
---------- ---------- ----------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $1,005,152 $705,399 $625,426
========== ========== ==========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash paid during the period for interest $1,308,519 $1,327,272 $1,348,128
========== ========== ==========
See Accompanying Notes to Financial Statements
-22-
CONCORD MILESTONE PLUS, L.P.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002, 2001 AND 2000
1. ORGANIZATION AND CAPITALIZATION
-------------------------------
Concord Milestone Plus, L.P., a Delaware limited partnership (the
"Partnership"), was formed on December 12, 1986, to invest in existing
income-producing commercial and industrial real estate, such as shopping
centers, office buildings, free-standing commercial warehouses and
distribution centers. Currently, the Partnership owns and operates three
shopping centers (the "Properties"), one located in Searcy, Arkansas (the
"Searcy Property"), one located in Valencia, California (the "Valencia
Property") and one located in Green Valley, Arizona (the "Green Valley
Property").
The Partnership commenced a public offering on April 8, 1987 in order to
fund the Partnership's real property acquisitions. The Partnership
terminated its public offering on April 2, 1988 and was fully subscribed to
with a total of 16,452 Bond Units and 15,188 Equity Units issued. Each Bond
Unit consisted of $1,000 principal amount of the Partnership's Escalating
Rate Collateralized Mortgage Bonds (the "Bonds") due November 30, 1997 and
36 Class B Interests ("Class B Interests"), each such interest representing
an assignment of one Class B Limited Partnership Interest held by CMP
Benefit Corp., a Delaware corporation (the "Assignor"), under the Amended
and Restated Agreement of Limited Partnership of the Partnership Agreement
(the "Partnership Agreement"). Each Equity Unit consisted of 100 Class A
Interests ("Class A Interests"), each interest representing an assignment of
one Class A Limited Partnership Interest held by the Assignor under the
Partnership Agreement, and 100 Class B Interests.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
BASIS OF ACCOUNTING, FISCAL YEAR
--------------------------------
The Partnership's financial statements are prepared following accounting
principles generally accepted in the United States of America. The
Partnership's tax records are maintained on the accrual basis of accounting.
Its fiscal year is the calendar year.
CASH AND CASH EQUIVALENTS
-------------------------
The Partnership considers all highly liquid debt instruments purchased with
a maturity of three months or less to be cash equivalents. The Partnership
occasionally maintains cash balances in financial institutions in excess of
the federally insured limits.
RESTRICTED CASH
---------------
Restricted cash consists of escrow deposits held by the lender for payment
of property taxes and an amount held pending the execution of a new lease of
the space formerly leased to Abco at the Green Valley property and
satisfaction of certain other conditions related thereto.
REVENUE RECOGNITION AND CREDIT RISKS
------------------------------------
Rental income is accrued as earned except when doubt exists as to
collectibility, in which case the accrual is discontinued. When rental
payments due under leases vary from a straight-line basis because of free
rent periods or stepped increases, income is recognized on a straight-line
basis in accordance with generally accepted accounting principles.
Reimbursed expenses represent a portion of property operating expense billed
to the tenants, including common area maintenance, real estate taxes and
other recoverable costs. Expenses subject to reimbursement are recognized in
the period when the expenses are incurred. Rental income based on a tenant's
revenues ("percentage rent") is accrued when a tenant reports sales that
exceed a specified amount.
Management analyses and adjusts the allowance for doubtful accounts based on
estimated collectibility. Management determines that an account
-23-
needs to be allowanced depending on the aging of the individual balances
receivable, recent payment history, contractual terms and other qualitative
factors such as status of business relationship with the tenants. The
Partnership identifies past due accounts receivable and invoices the related
tenants for finance charges, which are included in the accounts receivable.
Accounts receivable are written off in the fiscal year when all legal
collection procedures have been exhausted.
PROPERTY
--------
Property is carried at cost, and depreciated on a straight-line basis over
the estimated useful life of 31.5 years. Building improvements and other
depreciable assets are carried at cost, and depreciated on a straight-line
basis using an estimated useful life of 3 to 10 years. Leasehold
improvements are amortized on a straight-line basis over the lesser of the
estimated useful life or the remaining term of the lease. Total depreciation
expense was $616,753, $612,632, $596,210, in 2002, 2001, and 2000,
respectively.
The Partnership's individually reviews each of their properties for possible
impairment at least annually, and more frequently if circumstances warrant.
Impairment is determined to exist when the carrying amount of a property
exceeds its fair value. An impairment loss is recognized if the carrying
amount is not recoverable and exceeds fair value. The carrying amount of a
property is not recoverable if it exceeds the sum of undiscounted cash flows
expected from the property. No write downs for impairment of property
investments were recorded in 2002, 2001, and 2000.
The determination of a property's fair value is based, not only upon future
cash flows, which rely upon estimates and assumptions including expense
growth, occupancy and rental rates, but also upon market capitalization and
discount rates as well as other market indicators specific to each property.
The Partnership believes that the estimates and assumptions used are
appropriate in evaluating the recoverability of the carrying amount of the
Partnership's properties. However, changes in market conditions and
circumstances may occur in the near term which would cause these estimates
and assumptions to change, which, in turn, could cause the amounts
ultimately realized upon the sale or other disposition of the properties to
differ materially from their carrying value. Such changes may also require
future impairment write-downs in accordance with accounting rules.
INCOME TAXES
------------
The Partnership makes no provision for income taxes because all income and
losses are allocated to the partners and holders of Class A Interests and
Class B Interests for inclusion in their respective tax returns. The tax
bases of the Partnership's net assets and liabilities are $3,308,843 and
$3,197,863 higher than the amounts reported for financial statement purposes
at December 31, 2002 and 2001, respectively, due to the utilization of
different estimated useful lives for the depreciation of property for tax
and financial reporting purposes and the write-down of property during 1993
and 1994 for financial reporting purposes.
DEBT FINANCING COSTS
--------------------
The costs to obtain the Mortgage Loans (see Note 6) were capitalized and are
being amortized over the term of such mortgages using the effective interest
method.
INCOME (LOSS) PER CLASS A INTEREST
----------------------------------
The Partnership follows the provisions of Statement of Financial Accounting
Standards ("SFAS") No.128, "Earnings per Share". SFAS No.128 requires a
presentation of basic earnings per share and also requires dual presentation
of basic and diluted earnings per share on the face of the statement of
operations for all entities with complex capital structures. The Partnership
has no dilutive interests. Income (loss) per Class A interest amounts are
computed by dividing net income (loss) allocable to the limited partners by
the weighted average number of 100 Class A Interests outstanding during the
year.
STATEMENT OF COMPREHENSIVE INCOME (LOSS)
----------------------------------------
A statement of comprehensive income (loss) has not been included per SFAS
No.130, "Reporting Comprehensive Income", as the Partnership has no items of
other comprehensive income (loss). Comprehensive loss is the same as net
loss for each period presented.
-24-
STATEMENT OF DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED
--------------------------------------------------------------------
INFORMATION
-----------
SFAS No.131, "Disclosures about Segments of an Enterprise and Related
Information," establishes annual and interim reporting standards for an
enterprise's operating segments and related disclosures about its products,
services, geographic areas and major customers. The Partnership's operations
are within one reportable segment.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
-----------------------------------------------------------
The preparation of financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Significant estimates include the assumptions used in
evaluating the properties for impairment. Actual results could differ from
those estimates.
RECLASSIFICATIONS
-----------------
Certain reclassifications were made to the accompanying 2000 and 2001
financial statements to conform with the 2002 presentation.
CURRENT ACCOUNTING ISSUES
SFAS NO. 133 AND NO. 138
------------------------
Statement of Financial Accounting Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities" and SFAS No.
138, "Accounting for Certain Derivative Instruments and Certain Hedging
Activities, an Amendment of FASB 133" establishes accounting and reporting
standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. It
requires an entity to recognize all derivatives as either assets or
liabilities in the statement of financial position, and measure those
instruments at fair value. Changes in the fair value of those derivatives
will be reported in earnings or other comprehensive income depending on the
use of the derivative and whether the derivative qualifies for hedge
accounting. SFAS No. 133 and SFAS No. 138 apply to all fiscal quarters of
all fiscal years after June 30, 2000. The Partnership adopted SFAS No. 133,
as amended by SFAS No. 138, on January 1, 2001.
The Partnership has identified a minimal number of embedded
derivative instruments, which were evaluated for recording on the
Partnership's balance sheet at January 1, 2001. Within certain of its leases
with tenants in its Properties, the Partnership has embedded derivatives
resulting from possible limitations on scheduled rent increases, based on
changes in CPI. These types of limitations are common in the Partnership's
industry. These embedded derivatives have been valued at an insignificant
amountS, so the effect of recording this new accounting pronouncement was
inconsequential at January 1, 2001.
The adoption of SFAS No. 133 resulted in the Partnership recording a
net transition adjustment of an insignificant amount. The Partnership
expects that the adoption of SFAS No. 133 will not increase the volatility
of its reported earnings, as the embedded derivatives have not resulted in
any material change in the Partnership's earnings or cash flows in the past.
The Partnership believes that the impact of its embedded derivatives are not
likely to be material in the future.
SFAS NOS. 140, 141, 142 AND 144
-------------------------------
SFAS 140, "Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities -- a replacement of FASB No. 125,"
was issued in September 2000. It revises the standards for accounting for
securitizations and other transfers of financial assets and collateral and
requires certain disclosures, but carries most of the provisions contained
in SFAS NO. 125 without reconsideration. SFAS No. 140 is effective for
transfers and servicing of financial assets and extinguishments of
liabilities occurring after March 31, 2001. This statement is effective for
recognition and reclassification of collateral and for disclosures related
to securitization transactions and collateral for fiscal years ending after
December 15, 2000. The adoption of the provisions of SFAS No. 140 did not
have any impact on the Partnership.
In July 2001, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 141,
-25-
"Business Combinations". SFAS No. 141 addresses financial accounting and
reporting for business combinations and supersedes Accounting Principles
Board Opinion ("APB") No. 16, "Business Combinations", and SFAS No. 38,
"Accounting for Preacquisition Contingencies of Purchased Enterprises". All
business combinations covered by SFAS No. 141 are to be accounted for under
the purchase method. The adoption of SFAS No. 141 in July 2001 did not have
any impact on our financial position, results of operations or cash flows.
In July 2001, the FASB also issued SFAS No. 142, "Goodwill and Other
Intangible Assets". SFAS No. 142 addresses financial accounting and
reporting for intangible assets acquired individually or with a group of
other assets. SFAS No. 142 also addresses financial accounting and reporting
for goodwill and other intangible assets subsequent to their acquisition.
With the adoption of SFAS No. 142, goodwill is no longer subject to
amortization. Rather, goodwill is subject to at least an annual assessment
for impairment by applying a fair value-based test. The impairment loss is
the amount, if any, by which the implied fair value of goodwill is less than
the carrying or book value. SFAS No. 142 applies to fiscal years beginning
after December 15, 2001. Impairment loss for goodwill arising from the
initial application of SFAS No. 142 is to be reported as resulting from a
change in accounting principle. The adoption of SFAS No. 142 did not have
any impact on our financial position, results of operation or cash flows.
In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets". SFAS No. 144 supercedes SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived
Assets to be Disposed of" and APB No. 30, "Reporting the Results of
Operations - Reporting the Effects of the Disposal of a Segment Business and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions".
SFAS No. 144 establishes a single accounting model for assets to be disposed
of by sale, whether previously held and used or newly acquired. SFAS No. 144
retains the provisions of APB No. 30 for presentation of discontinued
operations in the income statement, but broadens the presentation to include
a component of an entity. SFAS No. 144 applies to fiscal years beginning
after December 15, 2001 and the interim periods within. The adoption of SFAS
No. 144 did not have any impact on our financial position, results of
operations or cash flow.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
-----------------------------------------
In July 2002, the FASB issued Statement of Financial Accounting standards
No. 146, "Accounting for Exit or Disposal Activities." Statement 146
addresses significant issues regarding the recognition, measurement, and
reporting of costs that are associated with exit and disposal activities,
including restructuring activities that currently are accounted for pursuant
to the guidance that the Emerging Issues Task Force set forth in Issue No.
94-3. The scope of Statement 146 also includes (1) costs related to
terminating a contract that is not a capital lease, (2) termination benefits
that employees who are involuntarily terminated received under the terms of
a one-time benefit arrangement that is not an ongoing benefit arrangement or
an individual deferred compensation contract and (3) costs to consolidate
facilities or relocate employees. Statement 146 is required to be effective
for our exit or disposal activities initiated after December 31, 2002. We do
not believe that the adoption of SFAS No. 146 will have an impact on our
financial position, results of operations or cash flows.
3. PARTNERSHIP AGREEMENT
---------------------
Pursuant to the terms of the Partnership Agreement, the general partner of
the Partnership, CM Plus Corporation, a Delaware corporation (the "General
Partner"), is liable for all general obligations of the Partnership to the
extent not paid by the Partnership.
Holders of Class A Interests and Class B Interests are not liable for
expenses, liabilities or obligations of the Partnership beyond the amount of
their contributed capital.
All distributable cash, capital proceeds, profit, gain or loss from
Partnership operations are generally allocated 1 percent to the General
Partner and 99 percent to the holders of Class A Interests. The holders of
Class B Interests were specifically allocated certain organization and
offering expenses to the extent of their positive capital account balances,
thus reducing their account balance to zero. After the holders of Class A
Interests have received the 12.5 percent Priority Return (as defined in the
Partnership Agreement) all distributable cash is allocated in a ratio of 85
percent to the holders of Class B Interests, 5 percent to the holders of
Class A Interests and 10 percent to the General Partner.
Since the inception of the Partnership, all income and distributable cash
with respect to the Equity Units has been allocated to the holders of Class
A Interests because they have not received the 12.5 percent Priority Return.
Therefore, no income has been allocated to the holders of Class B
-26-
Interests.
4. PROPERTIES AND RENT INCOME
--------------------------
On August 20, 1987, the Partnership purchased the Searcy Property, a
shopping center in Searcy, Arkansas from Concord Milestone Plus of Arkansas
Limited Partnership, an affiliated entity, for $4,050,000.
On January 22, 1988, the Partnership purchased the Valencia Property, a
shopping center in Valencia, California from Concord Milestone Plus of
California Limited Partnership, an affiliated entity, for $11,575,000.
On April 15, 1988, the Partnership purchased the Green Valley Property, a
shopping center in Green Valley, Arizona from Concord Milestone Plus of
Arizona Limited Partnership, an affiliated entity, for $9,687,000.
Minimum base rental income under non-cancelable tenant lease agreements,
having lease terms expiring from one to eight years, at December 31, 2002
are as follows:
Year Ended
December 31 Amount
----------- ----------
2003 $2,144,784
2004 1,670,817
2005 1,428,369
2006 825,203
2007 312,172
Thereafter 318,756
----------
Total $6,700,101
The above table does not include contingent rental amounts. The total
contingent rentals received in 2002, 2001, and 2000, were $165,558,
$181,002, and $148,585, respectively. A majority of the leases contain
provisions for additional rent calculated as a specified percentage of the
tenant's gross receipts above fixed minimum amounts and for reimbursement of
all or a portion of the tenant's pro rata share of real estate taxes,
insurance and common area maintenance expenses. Lucky Store, Inc. generated
10.57%, 11.04% and 11.55% in 2002, 2001 and 2000 of total revenue of the
Partnership.
5. RELATED PARTY TRANSACTIONS
--------------------------
The Partnership pays fees for customary property management services
("Management Fees") equal to a percentage of gross revenues from the
Properties, not to exceed 5 percent. The Management Fees are 3 percent for
the Searcy Property, 4 percent for the Valencia Property and 5 percent for
the Green Valley Property. Management Fees incurred for the years ended
December 31, 2002, 2001, and 2000, were $142,473, $132,561, and $129,660,
respectively. Management Fees are payable to Milestone Property Management,
Inc. ("MPMI") an affiliate of the General Partner.
The Partnership accrued and paid $68,500 to Milestone Properties, Inc.
("MPI") for administrative services for the years ended December 31, 2002.
As of December 31, 2001 and 2000, the Partnership accrued and paid $68,500
and $62,754, respectively, payable to MPI, the parent of the General
Partner, for administrative and management fees.
6. MORTGAGE LOANS PAYABLE
----------------------
As of September 30, 1997, the Partnership closed three fixed rate first
mortgage loans (the "Mortgage Loans") in the amounts of $2,865,000 (Searcy),
$8,445,000 (Valencia) and $5,400,000 (Green Valley). All three Mortgage
Loans are secured by cross-collateralized first mortgages on the
Partnership's shopping centers.
-27-
The Mortgage Loans and related terms at December 31, 2002 are summarized as
follows:
PRINCIPAL MONTHLY
BALANCE AT PAYMENTS OF
DECEMBER INTEREST PRINCIPAL
PROPERTY/LOCATION 31, 2002 RATE % AND INTEREST
----------------- ----------- -------- ------------
Searcy, AR $2,714,099 8.125 $21,640
Valencia, CA 7,839,064 8.125 65,881
Green Valley, AZ 5,122,790 8.250 41,252
----------- --------
Total $15,675,953 $128,773
=========== ========
The Mortgage Loans require payments of principal and interest through and
including September 1, 2007. On October 1, 2007, the balance of principal
and interest estimated to be $2,505,981, $7,003,227, and $4,738,096 for the
Searcy, Valencia and Green Valley Properties, respectively, will be due and
payable. Subsequent to October 31, 2003 and prior to May 31, 2007 each
Mortgage Loan may be prepaid in whole but not in part on any payment date
with a prepayment penalty equal to the greater of (i) 1% of the outstanding
principal balance at such time, or (ii) the excess, if any, of the present
value of the remaining scheduled principal and interest payments (including
any balloon payment) over the amount of principal being prepaid. The
Mortgage Loans may be prepaid without penalty on any payment date after May
31, 2007.
The scheduled principal payments of the Mortgage Loans at December 31, 2002
are as follows:
Year Ending
December 31 Amount
----------- -----------
2003 $257,102
2004 275,482
2005 302,865
2006 328,891
Thereafter 14,511,613
-----------
Total $15,675,953
===========
In connection with the Green Valley Mortgage Loan, the Partnership has
deposited $150,000 into an escrow account with the Lender. The funds held in
this escrow account may be released upon the execution of a new lease for
specified vacant anchor tenant space, with a termination date of July 31,
2004 or later, and the satisfaction of certain other conditions related
thereto.
CM Plus Corporation, the general partner of the Partnership, guarantees
certain limited recourse obligations under the Mortgage Loans.
7. FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------
The following estimated fair market values were determined by the
Partnership using available market information and valuation methodologies
considered appropriate by management. However, considerable judgement is
necessary to interpret and apply market data to develop specific fair market
value estimates for given financial instruments, and the use of different
market assumptions and/or estimation methodologies could have a material
effect on reported fair market value amounts. Accordingly, the estimates
presented herein are not necessarily indicative of the amounts that could be
realized upon disposition of the Partnership's financial instruments.
Cash and cash equivalents, accounts receivable and accrued expenses and
other liabilities are reflected in the balance sheets at cost, which is
considered by management to reasonably approximate fair market value due to
their short term nature.
The Partnership estimates the fair market value of its long term fixed rate
Mortgage Loans generally using discounted cash flow analysis based on
current rates for similar types of debt. At December 31, 2002, the fair
market value of the Mortgage Loans was estimated to be $17,214,736 compared
to a carrying value amount of $15,675,953. The fair market value estimates
presented herein are based on information available as of
-28-
December 31, 2002. Although management is not aware of any factors that
would significantly affect the estimated fair market value amounts, a
comprehensive re-evaluation of all of the Properties has not been performed
for purposes of these financial statement disclosures.
8. COMMITMENTS AND CONTINGENCIES
-----------------------------
During February 1999, the Partnership received notice from Abco, the
principal anchor tenant at the Green Valley Property, that Abco would not be
renewing its lease at the expiration of its term on July 31, 1999. Abco
vacated its space in May, 1999. This space represents about 20% of the Green
Valley Property's leaseable area. The Partnership retained a large regional
real estate brokerage firm to help market the space. Such brokerage firm was
replaced in 2000 by another large regional brokerage firm. Each of the
brokerage firms have shown the space to several qualified prospective
tenants. No replacement tenant for the entire space has been identified. The
recent building of a Safeway Supermarket near the Green Valley Property has
effectively negated the potential of a supermarket as a replacement tenant
for the former Abco. In March 2003, a lease was executed with Family Dollar,
Inc. for a 9,571 square foot portion of the former Abco building. The lease
is not effective until signed copies are actually received by Family Dollar.
As of March 21, 2003, the Partnership is awaiting the return of a certain
document required to be signed by the Partnership's lender prior to
returning executed lease documents to Family Dollar. The Partnership expects
to spend approximately $300,000 in conjunction with the Family Dollar lease,
including the costs of replacing the roof on the former Abco building.
Currently, approximately $150,000 of the Partnership's working capital is
being held in escrow in connection with the refinancing by the holder of the
first mortgage on the Green Valley Property pending the resolution of the
Abco vacancy. The Partnership is uncertain at this point if this $150,000
working capital or a portion of it will or will not be released as a result
of the Family Dollar lease.
Many of the tenants at the Green Valley Property have short term leases. It
is not possible to determine the long-term effects of the vacancy of either
the Abco space or the re-leasing of a portion of such space to Family
Dollar. To date the vacancy of the Abco space has not had a material adverse
effect on the results of operations at the Green Valley Property by
impairing the Partnership's ability to retain other tenants or to renew
their leases on favorable terms. However, no assurances can be given that
the remaining Abco space vacancy won't cause existing tenants to leave, or
won't cause tenant renewals to be at lower rental rates. The drop in the
occupancy rate of 67.33% at December 31, 2001 to 61.88% at December 31, 2002
is in line with the change in market occupancy in the Green Valley market
area. The Partnership will incur expenses in releasing the remaining vacant
Abco space and cannot predict how soon such space will be leased and the
terms of such new lease or leases. As of March 19, 2003 approximately 20% of
the tenants whose leases renew in 2003 have renewed such leases at increased
and competitive lease rates and Family Dollar has signed a lease for a
portion of the Abco space. Although these are viewed as positive trends, the
General Partner can not guarantee that the other tenants with leases
expiring in 2003 and in future years will renew such leases.
Investments in real property create a potential for environmental liability
on the part of the owner, operator or developer of such real property. If
hazardous substances are discovered on or emanating from any of the
Properties, the Partnership and/or others may be held strictly liable for
all costs and liabilities relating to the clean-up of such hazardous
substances, even if the problem was caused by another party or a tenant. The
Partnership is not aware of any existing environmental conditions that will
have a material effect on the financial statements.
From time to time, the Partnership is exposed to claims, regulatory, and
legal actions in the normal course of business, some of which are initiated
by the Partnership. At December 31, 2002, management believes that any such
outstanding issues can be resolved without significantly impairing the
financial condition of the Partnership.
-29-
CONCORD MILESTONE PLUS, L.P.
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2002
Costs Capitalized
Initial Cost Subsequent to Acquisition
-------------------------- ---------------------------
Land
Building & Building &
Description and Location Encumbrances Land Improvements Improvements Land
- --------------------------- ------------ ----------- ------------ ------------ -------------
Town & Country Plaza $2,714,099 $430,000 $3,620,000 $455,340 $430,000
Searcy, AR
Old Orchard Shopping Center 7,839,064 6,500,000 5,075,000 1,287,632 6,500,000
Valencia, CA
Green Valley Mall 5,122,790 5,100,000 4,587,000 1,461,602 4,057,034
Green Valley, AZ ----------- ----------- ----------- ---------- -----------
$15,675,953 $12,030,000 $13,282,000 $3,204,574 $10,987,034
=========== =========== =========== ========== ===========
Gross Amount at which Carried at
Close of Period
-----------------------------------------
Building & Accumulated Date Deperciation
Description and Location Improvements Total Depreciation Acquired Life
- --------------------------- ------------ ------------ ------------ -------- -------------
Town & Country Plaza $4,229,159 $4,659,159 $2,107,174 08/20/87 31.5 years
Searcy, AR
Old Orchard Shopping Center 6,638,240 13,138,240 3,337,130 01/22/88 31.5 years
Valencia, CA
Green Valley Mall
Green Valley, AZ 5,381,274 9,438,308 2,986,835 04/15/88 31.5 years
----------- ----------- ----------
$16,248,673 $27,235,707 $8,431,139
=========== =========== ==========
2002 2001 2000
(A) Reconciliation of investment properties owned:
Beginning balance $27,055,083 $26,898,343 $26,731,740
Property acquisitions/improvements 180,624 156,740 166,603
Write-down of property 0 0 0
----------- ----------- -----------
Balance at end of period $27,235,707 $27,055,083 $26,898,343
=========== =========== ===========
(B) Reconciliation of accumulated depreciation:
Beginning balance $7,814,386 $7,201,754 $6,605,544
Depreciation expense 616,753 612,632 596,210
---------- ---------- ----------
Balance at end of period $8,431,139 $7,814,386 $7,201,754
========== ========== ==========
-30-
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
---------------------------------------------------------------
FINANCIAL DISCLOSURE.
--------------------
During the last two fiscal years, no changes of accountants or
disagreements with accountants on accounting and financial disclosure occurred.
-31-
PART III
--------
ITEM 10. DIRECTORS AND OFFICERS OF THE REGISTRANT.
----------------------------------------
The names, offices held and the ages of the directors and executive officers of
the General Partner and of CMP Beneficial Corp. are as follows:
HAS SERVED AS A
DIRECTOR AND/OR
NAME AGE POSITION HELD OFFICER SINCE (1)
- --------------------- --- ------------- -----------------
Leonard S. Mandor (3) 56 President Inception (2)
and Director
Robert A. Mandor (3) 50 Vice President Inception
and Director
Joseph P. Otto 49 Vice President October 3, 1997
and Secretary
Patrick Kirse 34 Treasurer and October 3, 1997
Controller
- ----------------------------------
(1) Each director and officer of the General Partner and CMP Beneficial
Corp. will hold office until the next annual meeting of the General
Partner and CMP Beneficial Corp. and until his successor is elected
and qualified.
(2) The General Partner was incorporated on December 12, 1986 and CMP
Beneficial Corp. was incorporated on December 18,1986.
(3) Robert A. Mandor and Leonard S. Mandor are brothers.
LEONARD S. MANDOR is the Chairman of the Board, Chief Executive Officer and a
Director of MPI and has been associated with MPI since its inception in 1989.
ROBERT A. MANDOR is the President, Chief Financial Officer, and a Director of
MPI and has been associated with MPI since its inception in 1989.
JOSEPH P. OTTO was appointed Vice President and Secretary of CM Plus
Corporation, the General Partner of Concord Milestone Plus, L.P. in October
1997. Mr. Otto is also a Vice President of MPI and has been associated with MPI
since its inception in 1989.
PATRICK KIRSE was appointed Treasurer and Controller of CM Plus Corporation, the
General Partner of Concord Milestone Plus, L.P. in October 1997. Mr. Kirse also
serves as a Vice President of MPI. He is a CPA licensed in the state of
Missouri. Before joining MPI in 1995 he worked as a senior auditor with Deloitte
& Touche LLP since 1991.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
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Based on the General Partner's review of Forms 3, 4 and 5 furnished to the
Partnership, there were no late reports filed during 2002.
ITEM 11. COMPENSATION.
------------
During 2002, the Partnership paid or accrued:
(i) $68,500 to Milestone Properties, Inc. ("MPI"),the parent of the
General Partner, for administrative services rendered to the
Partnership. Pursuant to an agreement between MPI and the
Partnership, the Partnership reimburses MPI for administrative
services provided to the Partnership, such as payroll,
accounting, investor services and supplies in an amount equal to
$68,500
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per year.
(ii) $142,473 to MPMI for property management fees for the fiscal year ended
December 31, 2002. Pursuant to the management agreement between
the Partnership and MPMI, property management fees are equal to
a percentage of gross revenues not to exceed 5 percent for
multiple tenant properties for which MPMI performs leasing
services, 3 percent for multiple tenant properties for which
MPMI does not perform leasing services and 1 percent for single
tenant properties. The management fees are 3 percent for the
Searcy Property, 4 percent for the Valencia Property and 5
percent for the Green Valley Property. The management fee for
any Property may not exceed competitive fees for comparable
services reasonably available to the Partnership in the same
geographic area as the property in question. Gross revenues are
defined in the management agreement to mean, with respect to
each Property, all base, additional and percentage rents
collected from the Property but exclude all other receipts or
income with respect to that Property, such as, (i) receipts
arising out of any sale of assets or of all or part of the
Property, condemnation proceeds and other items of a similar
nature; (ii) payments made by tenants for over-standard finish
out improvements or other amortization; (iii) income derived
from interest on investments, security deposits, utility
deposits; (iv) proceeds of claims under insurance policies; (v)
abatements or reductions of taxes; (vi) security deposits made
by tenants; or (vii) any portions of rentals which are
specifically designated as amortization of, or interest on,
tenant moving expenses, takeover expenses or similar items in
the nature of advances by the Partnership.
No officer, or director of the General Partner received any direct compensation
from the Partnership during the fiscal year ended December 31, 2002.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
--------------------------------------------------------------
(a) The General Partner knows of only one beneficial owner of five
percent or more of the issued and outstanding Class A Interests. The General
Partner knows of only ONE beneficial owners of five percent or more of the
issued and outstanding Class B Interests, the information as to which is set
forth below as of March 1, 2003:
AMOUNT AND
NATURE OF
TITLE NAME AND ADDRESS OF BENEFICIAL PERCENT
OF CLASS BENEFICIAL OWNER OWNERSHIP OF CLASS
- ---------- ------------------- ---------- ----------
Class A KM Investments, LLC 98,068* 6.46%
Interests 199 South Los Robles
Suite #440
Pasadena, CA 91101
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Class B The Guardian Life 572,292* 27.11%
Interests Insurance Company
of America
203 Park Avenue South
New York, NY 10003
* To the best of the Partnership's knowledge, both The Guardian Life Insurance
Company of America and KM Investment, LLC have sole voting power and investment
power with respect to these securities.
(b) The General Partner, together with its affiliates and the officers and
directors of the General Partner, own less than 1% of the issued and outstanding
Class A Interests and less than 1% of the issued and outstanding Class B
Interests.
The number of shares of common stock, no par value, of MPI the parent of the
General Partner beneficially owned by all directors of the General Partner and
CMP Beneficial Corp., and all directors and officers of the General Partner and
CMP Beneficial Corp. as a group, as of March 1, 2002 is set forth in the
following table:
AMOUNT OF PERCENT
NAME OF BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP CLASS
---------------- --------- -----
Leonard S. Mandor 400 54%
Robert A. Mandor 267 36%
Joseph P. Otto 74 10%
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
----------------------------------------------
See Item 1, "Business," Item 5, "Market for Registrant's Units and Related
Security Holders Matters," Item 10, "Directors and Officers of the Registrant,"
and Item 11, "Compensation," of this Report for details. See also Note 5 of the
Notes to Financial Statements of the Partnership's Financial Statements included
in this Report.
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PART IV
ITEM 14. CONTROLS AND PROCEDURES.
-----------------------
(a) Evaluation of disclosure controls and procedures. Based on their evaluation
as of date within 90 days of the filing date of this Report, the President and
Controller of CM Plus Corporation, the General Partner of the Partnership, have
concluded that the Partnership's disclosure controls and procedures, as defined
in Rule 13a-14(c) under the Securities Exchange Act of 1934, are effective to
ensure that information required to be disclosed by the Partnership in the
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission's rules and forms.
(b) Changes in internal controls. There were no significant changes in the
Partnership's internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation.
ITEM 15. EXHIBITS AND REPORTS ON FORM 8-K.
--------------------------------
(a) Financial Statements and Financial Schedule
See Index to Financial Statements and Financial Schedule set forth in
Item 8 of this Report.
(b) Exhibits:
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- ------- -----------------------
3.1 Amended and Restated Agreement of Limited Partnership of Concord
Milestone Plus, L.P. Incorporated herein by reference to Exhibit A to
the Registrant's Prospectus included as Part I of the Registrant's
Post-Effective Amendment No. 3 to the Registrant's Registration
Statement on Form S-11 (the "Registration Statement") which was
declared effective on April 3, 1987.
3.2 Amendment No. 1 to Amended and Restated Agreement of Limited
Partnership of Concord Milestone Plus, L.P., included as Exhibit 3.2
to Registrant's Form 10-K for the fiscal year ended December 31, 1987
("1987 Form 10-K"), which is incorporated herein by reference.
3.3 Amendment No. 2 to Amended and Restated Agreement of Limited
Partnership of Concord Milestone Plus, L.P. included as Exhibit 3.3 to
the 1987 Form 10-K, which is incorporated herein by reference.
3.4 Amendment No. 3 to Amended and Restated Agreement of Limited
Partnership of Concord Milestone Plus, L.P. included as Exhibit 3.4 to
the 1987 Form 10-K, which is incorporated herein by reference.
3.5 Amendment No. 4 to Amended and Restated Agreement of Limited
Partnership of Concord Milestone Plus, L.P. included as Exhibit 3.5 to
the 1987 Form 10-K, which is incorporated herein by reference.
3.6 Amendment No. 5 to Amended and Restated Agreement of Limited
Partnership of Concord Milestone Plus, L.P. included as Exhibit 3.6 to
Registrant's Form 10-K for the fiscal year ended December 31, 1988,
("1998 Form 10-K"), which is incorporated herein by reference.
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4.1 Form of certificate evidencing Class A Interests included as Exhibit
4.3 to the 1987 Form 10-K, which is incorporated herein by reference.
4.2 Form of certificate evidencing Class B Interests included as Exhibit
4.4 to the 1987 Form 10-K, which is incorporated herein by reference.
10.1 Property purchase agreements. Incorporated herein by reference to
Exhibit 10.1 to the Registration Statement.
10.2 Form of property management agreement. Incorporated herein by
reference to Exhibit 10.2 of the Registration Statement.
10.3 First Amendment to Management Agreement by and between Concord
Milestone Plus, L.P. and Concord Assets Management, Inc. Incorporated
herein by reference to Exhibit 10.3 of the 1988 Form 10-K.
10.4 Second Amendment to Management Agreement by and between Concord
Milestone Plus, L.P. and Concord Assets Management, Inc. Incorporated
herein by reference to Exhibit 10.4 of the 1988 Form 10-K.
10.5 Fixed Rate Note, dated September 23, 1997, executed by the Partnership
in favor of Lender, relating to the property located in Green Valley,
Arizona. Incorporated herein by reference to Exhibit 10.1 of the
Partnership's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997 (the "September 1997 10-Q").
10.6 Mortgage, Deed of Trust, Assignment of Leases and Rents, Security
Agreement and Fixture Filing, dated September 23, 1997, executed by
the Partnership for the benefit of Lender, relating to the property
located in Green Valley, Arizona. Incorporated herein by reference to
Exhibit 10.2 of the September 1997 10-Q.
10.7 Assignment of Leases and Rents, dated September 23, 1997, executed by
the Partnership for the benefit of Lender, relating to the property
located in Green Valley, Arizona. Incorporated herein by reference to
Exhibit 10.3 of the September 1997 10-Q.
10.8 Environmental Liabilities Agreement, dated September 23, 1997,
executed by the Partnership and CM Plus Corporation for the benefit of
Lender, relating to the property located in Green Valley, Arizona.
Incorporated herein by reference to Exhibit 10.4 of the September 1997
10-Q.
10.9 Tenant Occupancy Escrow and Security Agreement, dated September 23,
1997, by and between the Partnership and the Lender, relating to the
property located in Green Valley, Arizona. Incorporated herein by
reference to Exhibit 10.5 of the September 1997 10-Q.
10.10 Fixed Rate Note, dated September 23, 1997, executed by the Partnership
in favor of Lender, relating to the property located in Searcy,
Arkansas. Incorporated herein by reference to Exhibit 10.6 of the
September 1997 10-Q.
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10.11 Mortgage, Deed of Trust and Security Agreement, dated September 23,
1997, executed by the Partnership for the benefit of Lender, relating
to the property located in Searcy, Arkansas. Incorporated herein by
reference to Exhibit 10.7 of the September 1997 10-Q.
10.12 Assignment of Leases and Rents, dated September 23, 1997, executed by
the Partnership for the benefit of Lender, relating to the property
located in Searcy, Arkansas. Incorporated herein by reference to
Exhibit 10.8 of the September 1997 10-Q.
10.13 Environmental Liabilities Agreement, dated September 23, 1997,
executed by the Partnership and CM Plus Corporation for the benefit of
Lender, relating to the property located in Searcy, Arkansas.
Incorporated herein by reference to Exhibit 10.9 of the September 1997
10-Q.
10.14 Fixed Rate Note, dated September 23, 1997, executed by the Partnership
in favor of Lender, relating to the property located in Valencia,
California. Incorporated herein by reference to Exhibit 10.10 of the
September 1997 10-Q.
10.15 Deed of Trust, Assignment of leases, and Rents, Security Agreement and
Fixture Filing, dated September 23, 1997, executed by the Partnership
for the benefit of Lender, relating to the property located in
Valencia, California. Incorporated herein by reference to Exhibit
10.11 of the September 1997 10-Q.
10.16 Assignment of Leases and Rents, dated September 23, 1997, executed by
the Partnership for the benefit of Lender, relating to the property
located in Valencia, California. Incorporated herein by reference to
Exhibit 10.12 of the September 1997 10-Q.
10.17 Environmental Liabilities Agreement, dated September 23, 1997,
executed by the Partnership and CM Plus Corporation for the benefit of
Lender, relating to the property located in Valencia, California.
Incorporated herein by reference to Exhibit 10.13 of the September
1997 10-Q.
10.18 Environmental Escrow and Security Agreement, dated September 23, 1997,
by and between the Partnership and the Lender, relating to the
property located in Valencia, California. Incorporated herein by
reference to Exhibit 10.14 of the September 1997 10-Q.
99.1 Certification of Leonard Mandor, President of CM Plus Corporation, the
General Partner of the Partnership pursuant to 18 U.S.C.ss.1350, was
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002,
dated March [15], 2003.
99.2 Certification of Patrick Kirse, Treasurer and Controller of CM Plus
Corporation, the General Partner of the Partnership pursuant to 18
U.S.C.ss.1350, was adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, dated March [15], 2003.
99.3 Certification of Leonard Mandor, President of CM Plus Corporation, the
General Partner of the Partnership pursuant to 18 U.S.C.ss.1350, was
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
dated March [15], 2003.
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99.4 Certification of Patrick Kirse, Treasurer and Controller of CM Plus
Corporation, the General Partner of the Partnership pursuant to 18
U.S.C.ss.1350, was adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, dated March [15], 2003.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunder duly authorized on March 26, 2003.
CONCORD MILESTONE PLUS, L.P.
By: CM PLUS CORPORATION,
General Partner
By: /s/ Leonard S. Mandor
----------------------------
Leonard S. Mandor, President
CMP BENEFICIAL CORP.
(Registrant of Beneficial Interests)
By: /s/ Leonard S. Mandor
---------------------
Leonard S. Mandor, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed by the following persons in the capacities and on the dates
indicated.
By: /s/ Leonard S. Mandor March 26, 2003
-----------------------------------------------
Leonard S. Mandor
President (Principal Executive Officer)
and Director of CM Plus Corporation
and CMP Beneficial Corp.
By: /s/ Robert A. Mandor March 26, 2003
-----------------------------------------------
Robert A. Mandor
Vice President and Director of CM Plus
Corporation and CMP Beneficial Corp.
By: /s/ Patrick Kirse March 26, 2003
-----------------------------------------------
Patrick Kirse
Treasurer and Controller (Principal Accounting
Officer) of CM Plus Corporation and CMP
Beneficial Corp.
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